Are Offshore Tax Shelters Dead?

By

Robert Frank

Feb 18, 2010 10:36 am ET

Associated Press

It has been a discouraging week for wealthy tax evaders.

First came news that a U.S. client of HSBC Holdings pleaded guilty to conspiracy as part of a widening investigation into so-called offshoring by wealthy Americans. The client, a doctor named Andrew Silva, of Sterling, Va., pleaded guilty to conspiracy to defraud the U.S. government by hiding about $250,000 in an account at a Swiss unit of HSBC. (He mailed himself packages of tightly stacked $100 bills to try to avoid detection).

Finally, research from Financial News found that wealthy Europeans have brought home about $500 billion from offshore accounts as part of repatriation programs and tax investigations.

It all adds up to a grim outlook for offshore tax avoiders. Some experts say that with the U.S. and Europe becoming so strict (more out of the need for revenue, perhaps, than a sudden devotion to the tax code), offshoring is quickly becoming a relic of the wealth-management past.